Kentucky Budget Surplus Less Likely

Kentucky's general fund tax revenues increased 2.4 percent in March - enough to ward off a deficit but not enough to promise a surplus.

State Budget Director Jane Driskell announced the state collected $753.5 million in March, a $17.7 million increase from last year. State officials predicted Kentucky's revenues would grow 2.1 percent in the 2014 budget year that ends June 30. For that to happen, revenues must grow 3.9 percent in the next three months.

Driskell said she is confident the state will meet the estimate but said a surplus is becoming less likely.

Road fund revenues increased $22.8 million in March, an increase of 19.9 percent. Road fund collections must increase an additional 2.7 percent over the next three months in order to meet the estimate.

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As Kentucky lawmakers kick off the inaugural day of the 2014 General Assembly, the scope of the state's dire budgetary situation is coming into focus: Legislators will have to find a way to come up with $3.6 billion to fully fund agency budget requests.

Data from the Office of the State Budget Director shows that budget requests from all three branches of state government as well as state agencies totals over $23 billion for the next two fiscal years.

The state’s general fund, however, is expected to have less than $20 billion in revenue.

The state’s budget director, Jane Driskell, has warned that budget cuts are likely.

Gov. Steve Beshear will submit his budget proposal to lawmakers on Jan. 21.

After winning speedy approval in the Senate, the Kentucky House has given final passage of the state’s $20 billion two-year budget.

Lawmakers passed a series of budget bills funding the legislative, judicial and executive branches of state government with minimal debate, and earlier than they have in previous years.

The budget bills will head to Gov. Steve Beshear’s desk for approval. They largely preserve his efforts to fund K-12 education at the cost of other state programs.

House Speaker Greg Stumbo hailed the compromise with the Senate as an example of how democracy can work.

“The gridlock and the stalemate that’s engulfed both parties in Washington didn’t make it’s way to Kentucky. It worked," Stumbo said, to applause from fellow lawmakers. "And you can go home tonight and you can look your constituents in the eye while you’re on this veto break and you can say it worked. We did what you paid us to do.”

Lawmakers will now break for two weeks until returning April 14 for a veto session.

Provisions to block state money from being used on Kentucky's implementation of the Affordable Care Act will remain in the budget agreement reached over the weekend by state lawmakers. Sparring between House Democrats and Senate Republicans over the ACA dominated negotiations.

The ACA covers the costs of implementation through 2017, after which the tab will be split with the state.

Now, Senate President Robert Stivers says lawmakers will send the governor a budget that blocks general funds from going toward the state's health insurance exchange, Kynect, and the expansion of Medicaid.

"I think everybody saw that we have worked hard over the last three or four days," the Manchester Republican said. "There's been a lot of discussions. At points in time there may have been a little bit of political theater involved but we've reached an agreement, compromising and understanding the realities of each person's positions and each region's positions and each party's positions."

Currently, over 320,000 people have been insured through Kynect, with two-thirds obtaining Medicaid coverage.